EXHIBIT 99.1
J.JILL, INC. ANNOUNCES THIRD QUARTER FY22 RESULTS
Delivers Solid Gross Margin of 69.9%, an increase of 100bps over Q3 FY21
Q3 FY22 Income from Operations, In-line with Q3 FY21
Provides Q4 and FY22 Outlook
Quincy, MA – December 6, 2022 – J.Jill, Inc. (NYSE:JILL) today announced financial results for the third quarter ended October 29, 2022.
Claire Spofford, President and Chief Executive Officer of J.Jill, Inc. stated, “We delivered better than expected third quarter earnings performance supported by our disciplined approach to flowing newness, full price selling, and inventory and expense management. These results reflect our ability to navigate within a challenging consumer environment as well as the increased planned strategic investments to support our growth strategies, including the August launch of our inclusive sizing initiative and Welcome Everybody campaign. We look forward to expanding on this progress and becoming more relevant for our core customer while also welcoming new customers.”
Ms. Spofford, continued, “As we look ahead to the end of the fiscal year, we continue to take a cautious approach to our outlook. That said, we remain focused on executing against our operating model which has delivered strong financial results year to date.”
For the third quarter ended October 29, 2022:
Excluding the non-recurring and other one-time costs from both periods, SG&A as a percentage of total net sales was 56.5% compared to 56.5% in the third quarter of fiscal 2021.
1
For the thirty-nine weeks ended October 29, 2022:
2
Balance Sheet Highlights
*Non-GAAP financial measures. Please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP Net Income to Adjusted EBITDA, Adjusted Income from Operations and Adjusted Net Income” for more information.
Outlook
For the fourth quarter of fiscal 2022, the Company expects revenues to be flat to down 3% compared to the fourth quarter of fiscal 2021, and for Adjusted EBITDA to be in the range of $9.0 million and $11.0 million.
For fiscal 2022, the Company expects revenues to grow between 4.0% and 5.0% compared to fiscal 2021, and for Adjusted EBITDA to be in the range of $103 million and $105 million.
For fiscal 2022, the Company now expects total capital expenditures of about $13.0 million. The Company expects to close net 4 stores in the fourth quarter of fiscal 2022, including the opening of 1 new store late in the fourth quarter, ending the year with 243 stores.
Conference Call Information
A conference call to discuss third quarter 2022 results is scheduled for today, December 6, 2022, at 8:00 a.m. Eastern Time. Those interested in participating in the call are invited to dial (888) 330-3391 or (646) 960-0845 if calling internationally. Please dial in approximately 10 minutes prior to the start of the call and reference Conference ID 2289963 when prompted. A live audio webcast of the conference call will be available online at http://investors.jjill.com/Investors-Relations/News-Events/events.
A taped replay of the conference call will be available approximately two hours following the call and can be accessed both online and by dialing (800) 770-2030 or (647) 362-9199. The pin number to access the telephone replay is 2289963. The telephone replay will be available until Tuesday, December 13, 2022.
About J.Jill, Inc.
J.Jill is a premier omnichannel retailer and nationally recognized women’s apparel brand committed to delighting customers with great wear-now product. The brand represents an easy, thoughtful and inspired style that reflects the confidence of remarkable women who live life with joy, passion and purpose. J.Jill offers a guiding customer experience through 247 stores nationwide and a robust ecommerce platform. J.Jill is headquartered outside Boston. For more information, please visit www.jjill.com or http://investors.jjill.com. The information included on our websites is not incorporated by reference herein.
3
Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements presented in accordance with generally accepted accounting principles (“GAAP”), we use the following non-GAAP measures of financial performance:
While we believe that Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS are useful in evaluating our business, they are non-GAAP financial measures that have limitations as analytical tools. Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS should not be considered alternatives to, or substitutes for, Net Income (Loss) or EPS, which are calculated in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS differently or not at all, which reduces the usefulness of such non-GAAP financial measures as tools for comparison. We recommend that you review the reconciliation and calculation of Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS to Net Income (Loss) and EPS, the most directly comparable GAAP financial measures, under “Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA and Adjusted Net Income (Loss) as well as Reconciliation of GAAP Operating Income (Loss) to Adjusted Income (Loss) from Operations” and not rely solely on Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss), Adjusted Diluted EPS or any single financial measure to evaluate our business.
4
Forward-Looking Statements
This press release contains, and oral statements made from time to time by our representatives may contain, “forward-looking statements.” Forward-looking statements include statements under “Outlook” and other statements identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on our current expectations and assumptions regarding capital market conditions, our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, regional, national or global political, economic, business, competitive, market and regulatory conditions, including risks regarding our ability to manage inventory or anticipate consumer demand; changes in consumer confidence and spending; our competitive environment; our failure to open new profitable stores or successfully enter new markets; the impact of the COVID-19 epidemic on the Company and the economy as a whole; post-pandemic changes in customer behavior and the timeline of economic recovery; and other factors set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 29, 2022. Any forward-looking statement made in this press release speaks only as of the date on which it is made. J.Jill undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
(Tables Follow)
5
J.Jill, Inc.
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
(Amounts in thousands, except share and per share data)
|
| For the Thirteen Weeks Ended |
| |||||
|
| October 29, 2022 |
|
| October 30, 2021 |
| ||
Net sales |
| $ | 150,204 |
|
| $ | 151,731 |
|
Costs of goods sold |
|
| 45,181 |
|
|
| 47,196 |
|
Gross profit |
|
| 105,023 |
|
|
| 104,535 |
|
Selling, general and administrative expenses |
|
| 84,873 |
|
|
| 85,531 |
|
Impairment of long-lived assets |
|
| 1,300 |
|
|
| — |
|
Operating income |
|
| 18,850 |
|
|
| 19,004 |
|
Interest expense |
|
| 4,348 |
|
|
| 4,567 |
|
Interest expense, net - related party |
|
| 1,092 |
|
|
| 607 |
|
Income before provision for income taxes |
|
| 13,410 |
|
|
| 13,830 |
|
Income tax provision |
|
| 4,491 |
|
|
| 2,592 |
|
Net income and total comprehensive income |
| $ | 8,919 |
|
| $ | 11,238 |
|
Net income per common share attributable to common shareholders |
|
|
|
|
|
| ||
Basic |
| $ | 0.64 |
|
| $ | 0.81 |
|
Diluted |
| $ | 0.62 |
|
| $ | 0.79 |
|
Weighted average number of common shares outstanding |
|
|
|
|
|
| ||
Basic |
|
| 13,962,467 |
|
|
| 13,798,130 |
|
Diluted |
|
| 14,297,925 |
|
|
| 14,174,218 |
|
6
J.Jill, Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(Amounts in thousands, except share and per share data)
|
| For the Thirty-Nine Weeks Ended |
| |||||
|
| October 29, 2022 |
|
| October 30, 2021 |
| ||
Net sales |
| $ | 467,616 |
|
| $ | 440,053 |
|
Costs of goods sold |
|
| 140,656 |
|
|
| 138,339 |
|
Gross profit |
|
| 326,960 |
|
|
| 301,714 |
|
Selling, general and administrative expenses |
|
| 254,624 |
|
|
| 250,516 |
|
Impairment of long-lived assets |
|
| 1,408 |
|
|
| — |
|
Operating income |
|
| 70,928 |
|
|
| 51,198 |
|
Fair value adjustment of derivative |
|
| — |
|
|
| 2,775 |
|
Fair value adjustment of warrants - related party (a) |
|
| — |
|
|
| 56,984 |
|
Interest expense, net |
|
| 11,553 |
|
|
| 13,130 |
|
Interest expense, net - related party |
|
| 2,823 |
|
|
| 1,597 |
|
Income (loss) before provision for income taxes |
|
| 56,552 |
|
|
| (23,288 | ) |
Income tax provision |
|
| 15,413 |
|
|
| 8,430 |
|
Net income (loss) and total comprehensive income (loss) |
| $ | 41,139 |
|
| $ | (31,718 | ) |
Net Income (loss) per common share attributable to common shareholders: |
|
|
|
|
|
| ||
Basic |
| $ | 2.95 |
|
| $ | (2.65 | ) |
Diluted |
| $ | 2.89 |
|
| $ | (2.65 | ) |
Weighted average number of common shares outstanding: |
|
|
|
|
|
| ||
Basic |
|
| 13,922,460 |
|
|
| 11,971,405 |
|
Diluted |
|
| 14,240,486 |
|
|
| 11,971,405 |
|
7
J.Jill, Inc.
Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands, except common share data)
|
| October 29, 2022 |
|
| January 29, 2022 |
| ||
Assets |
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 90,080 |
|
| $ | 35,957 |
|
Accounts receivable, net |
|
| 7,979 |
|
|
| 5,811 |
|
Inventories, net |
|
| 60,129 |
|
|
| 56,024 |
|
Prepaid expenses and other current assets |
|
| 26,490 |
|
|
| 25,456 |
|
Total current assets |
|
| 184,678 |
|
|
| 123,248 |
|
Property and equipment, net |
|
| 49,030 |
|
|
| 57,329 |
|
Intangible assets, net |
|
| 75,069 |
|
|
| 80,711 |
|
Goodwill |
|
| 59,697 |
|
|
| 59,697 |
|
Operating lease assets, net |
|
| 120,848 |
|
|
| 130,744 |
|
Other assets |
|
| 78 |
|
|
| 120 |
|
Total assets |
| $ | 489,400 |
|
| $ | 451,849 |
|
Liabilities and Shareholders’ Deficit |
|
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
|
| ||
Accounts payable |
| $ | 47,843 |
|
| $ | 49,924 |
|
Accrued expenses and other current liabilities |
|
| 63,724 |
|
|
| 48,853 |
|
Current portion of long-term debt |
|
| 2,739 |
|
|
| 7,692 |
|
Current portion of operating lease liabilities |
|
| 34,517 |
|
|
| 32,276 |
|
Total current liabilities |
|
| 148,823 |
|
|
| 138,745 |
|
Long-term debt, net of discount and current portion |
|
| 196,446 |
|
|
| 196,511 |
|
Long-term debt, net of discount and current portion - related party |
|
| 8,428 |
|
|
| 5,605 |
|
Deferred income taxes |
|
| 10,233 |
|
|
| 10,704 |
|
Operating lease liabilities, net of current portion |
|
| 126,205 |
|
|
| 143,207 |
|
Other liabilities |
|
| 1,257 |
|
|
| 1,731 |
|
Total liabilities |
|
| 491,392 |
|
|
| 496,503 |
|
Commitments and contingencies |
|
|
|
|
|
| ||
Shareholders’ Deficit |
|
|
|
|
|
| ||
Common stock, par value $0.01 per share; 50,000,000 shares authorized; 10,151,938 and 10,001,422 shares issued and outstanding at October 29, 2022 and January 29, 2022, respectively |
|
| 102 |
|
|
| 100 |
|
Additional paid-in capital |
|
| 211,268 |
|
|
| 209,747 |
|
Accumulated deficit |
|
| (213,362 | ) |
|
| (254,501 | ) |
Total shareholders’ deficit |
|
| (1,992 | ) |
|
| (44,654 | ) |
Total liabilities and shareholders’ deficit |
| $ | 489,400 |
|
| $ | 451,849 |
|
8
J.Jill, Inc.
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(Unaudited)
(Amounts in thousands)
|
| For the Thirteen Weeks Ended |
| |||||
|
| October 29, 2022 |
|
| October 30, 2021 |
| ||
Net income |
| $ | 8,919 |
|
| $ | 11,238 |
|
Interest expense, net |
|
| 4,348 |
|
|
| 4,567 |
|
Interest expense, net - related party |
|
| 1,092 |
|
|
| 607 |
|
Income tax provision |
|
| 4,491 |
|
|
| 2,592 |
|
Depreciation and amortization |
|
| 6,406 |
|
|
| 7,227 |
|
Equity-based compensation expense (b) |
|
| 897 |
|
|
| 789 |
|
Write-off of property and equipment (c) |
|
| 68 |
|
|
| 171 |
|
Adjustment for costs to exit retail stores (d) |
|
| — |
|
|
| (471 | ) |
Impairment of long-lived assets (e) |
|
| 1,300 |
|
|
| — |
|
Other non-recurring items (f) |
|
| 2 |
|
|
| 240 |
|
Adjusted EBITDA |
| $ | 27,523 |
|
| $ | 26,960 |
|
Net sales |
| $ | 150,204 |
|
| $ | 151,731 |
|
Adjusted EBITDA margin |
|
| 18.3 | % |
|
| 17.8 | % |
|
| For the Thirty-Nine Weeks Ended |
| |||||
|
| October 29, 2022 |
|
| October 30, 2021 |
| ||
|
|
|
|
|
|
| ||
Net income (loss) |
| $ | 41,139 |
|
| $ | (31,718 | ) |
Fair value adjustment of derivative |
|
| — |
|
|
| 2,775 |
|
Fair value adjustment of warrants - related party (a) |
|
| — |
|
|
| 56,984 |
|
Interest expense, net |
|
| 11,553 |
|
|
| 13,130 |
|
Interest expense, net - related party |
|
| 2,823 |
|
|
| 1,597 |
|
Income tax provision |
|
| 15,413 |
|
|
| 8,430 |
|
Depreciation and amortization |
|
| 19,450 |
|
|
| 22,098 |
|
Equity-based compensation expense (b) |
|
| 2,615 |
|
|
| 1,881 |
|
Write-off of property and equipment (c) |
|
| 231 |
|
|
| 887 |
|
Adjustment for costs to exit retail stores (d) |
|
| (246 | ) |
|
| (1,181 | ) |
Impairment of long lived assets (e) |
|
| 1,408 |
|
|
| — |
|
Other non-recurring items (f) |
|
| 6 |
|
|
| 1,708 |
|
Adjusted EBITDA |
| $ | 94,392 |
|
| $ | 76,591 |
|
Net sales |
| $ | 467,616 |
|
| $ | 440,053 |
|
Adjusted EBITDA margin |
|
| 20.2 | % |
|
| 17.4 | % |
9
J.Jill, Inc.
Reconciliation of GAAP Operating Income to Adjusted Income from Operations
(Unaudited)
(Amounts in thousands)
|
| For the Thirteen Weeks Ended |
| |||||
|
| October 29, 2022 |
|
| October 30, 2021 |
| ||
|
|
|
|
|
|
| ||
Operating income |
| $ | 18,850 |
|
| $ | 19,004 |
|
Adjustment for costs to exit retail stores (a) |
|
| — |
|
|
| (471 | ) |
Impairment of long-lived assets (b) |
|
| 1,300 |
|
|
| — |
|
Other non-recurring items (c) |
|
| 2 |
|
|
| 240 |
|
Adjusted income from operations |
| $ | 20,152 |
|
| $ | 18,773 |
|
|
|
|
|
|
|
| ||
|
| For the Thirty-Nine Weeks Ended |
| |||||
|
| October 29, 2022 |
|
| October 30, 2021 |
| ||
|
|
|
|
|
|
| ||
Operating income |
| $ | 70,928 |
|
| $ | 51,198 |
|
Adjustment for costs to exit retail stores (a) |
|
| (246 | ) |
|
| (1,181 | ) |
Impairment of long-lived assets (b) |
|
| 1,408 |
|
|
| — |
|
Other non-recurring items (c) |
|
| 6 |
|
|
| 1,708 |
|
Adjusted income from operations |
| $ | 72,096 |
|
| $ | 51,725 |
|
10
J.Jill, Inc.
Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income
(Unaudited)
(Amounts in thousands, except share and per share data)
|
| For the Thirteen Weeks Ended |
| |||||
|
| October 29, 2022 |
|
| October 30, 2021 |
| ||
Net income and total comprehensive income |
| $ | 8,919 |
|
| $ | 11,238 |
|
Add: Income tax provision |
|
| 4,491 |
|
|
| 2,592 |
|
Income before provision for income tax |
|
| 13,410 |
|
|
| 13,830 |
|
Add: Adjustment for costs to exit retail stores (b) |
|
| — |
|
|
| (471 | ) |
Add: Impairment of long-lived assets (c) |
|
| 1,300 |
|
|
| — |
|
Add: Other non-recurring items (d) |
|
| 2 |
|
|
| 240 |
|
Adjusted income before income tax provision |
|
| 14,712 |
|
|
| 13,599 |
|
Less: Adjusted tax provision (e) |
|
| 3,737 |
|
|
| 4,379 |
|
Adjusted net income |
| $ | 10,975 |
|
| $ | 9,220 |
|
|
|
|
|
|
|
| ||
Adjusted net income per share attributable to common shareholders |
|
|
|
|
|
| ||
Basic |
| $ | 0.79 |
|
| $ | 0.67 |
|
Diluted |
| $ | 0.77 |
|
| $ | 0.65 |
|
Weighted average number of common shares |
|
|
|
|
|
| ||
Basic |
|
| 13,962,467 |
|
|
| 13,798,130 |
|
Diluted |
|
| 14,297,925 |
|
|
| 14,174,218 |
|
|
| For the Thirty-Nine Weeks Ended |
| |||||
|
| October 29, 2022 |
|
| October 30, 2021 |
| ||
Net income (loss) and total comprehensive income (loss) |
| $ | 41,139 |
|
| $ | (31,718 | ) |
Add: Income tax provision |
|
| 15,413 |
|
|
| 8,430 |
|
Income (loss) before provision for income tax |
|
| 56,552 |
|
|
| (23,288 | ) |
Add: Fair value adjustment of derivative |
|
| — |
|
|
| 2,775 |
|
Add: Fair value adjustment of warrants - related party (a) |
|
| — |
|
|
| 56,984 |
|
Add: Adjustment for costs to exit retail stores (b) |
|
| (246 | ) |
|
| (1,181 | ) |
Add: Impairment of long-lived assets (c) |
|
| 1,408 |
|
|
| — |
|
Add: Other non-recurring items (d) |
|
| 6 |
|
|
| 1,708 |
|
Adjusted income before income tax provision |
|
| 57,720 |
|
|
| 36,998 |
|
Less: Adjusted tax provision(e) |
|
| 14,661 |
|
|
| 11,913 |
|
Adjusted net income |
| $ | 43,059 |
|
| $ | 25,085 |
|
|
|
|
|
|
|
| ||
Adjusted net income per share attributable to common shareholders |
|
|
|
|
|
| ||
Basic |
| $ | 3.09 |
|
| $ | 2.10 |
|
Diluted |
| $ | 3.02 |
|
| $ | 1.84 |
|
Weighted average number of common shares |
|
|
|
|
|
| ||
Basic |
|
| 13,922,460 |
|
|
| 11,971,405 |
|
Diluted |
|
| 14,240,486 |
|
|
| 13,657,543 |
|
11
Contacts:
Investor Relations:
Caitlin Churchill
ICR, Inc.
investors@jjill.com
203-682-8200
Business and Financial Media:
Ariel Kouvaras
Sloane & Company
akouvaras@sloanepr.com
973-897-6241
Brand Media:
Meredith Schwenk
J.Jill, Inc.
media@jjill.com
617-376-4399
12